Let’s say that Savoy Jr. has two job offers on the table.
One is a job that pays $1,000,000/year for 1 year. After this year is over, he can do whatever he likes.
Another offer is a job that pays $80,000 with great security.
The average job available to Savoy Jr on the market in a pinch pays $75,000.
Savoy:
“Son, my advanced calculation says that you should take the $80,000 for 40 years. 80,000 x 40 is THREE POINT TWO MILLION DOLLARS, which is 3.2x more than the one million dollars. Also, my numbers say you can just work 20+ jobs at once since I didn’t factor in time as a resource.”
Savoy Jr.:
“But Dad, I can invest most of the $1,000,000 and work the $75k job for the other 39 years if I need to. That equals 3.9million plus whatever I get in dividends and th-
Savoy:
“HOW MANY TIMES DO I HAVE TO TELL YOU THAT 80,000 x 40 IS WAY MORE THAN 1,000,000 x 1?!?
MY STATISTIC SAYS ITS BETTER!”